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CIA — Practice Questions, Part 1 flashcards

6 of 60 questions free to study here · 5 topics · the whole deck is built into Willys

Multiple-choice practice questions, one best answer each, on the mandate and charter, independence, ethics, governance and the Three Lines Model, COSO control and ERM, fraud and quality assessment.

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Practice deck · part of IIA Certified Internal Auditor (CIA), Parts 1–3 · written against: IIA CIA exam syllabus effective 2025, aligned with the Global Internal Audit Standards (2024). Updated 2026-10-10.

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  1. A newly appointed CAE at a public university learns that a state statute requires internal audit to review research grant spending every year. The board-approved charter says nothing about this. What should the CAE do?

    A) Ask the external auditor to take over the statutory review instead
    B) Perform the grant reviews but keep them outside the internal audit plan
    C) Treat the statute as advisory only, since only the board can grant a mandate to internal audit
    D) Document the statutory duty in the charter and confirm the board understands it
    D) Document the statutory duty in the charter and confirm the board understands it

    Laws and regulations can be a source of the internal audit mandate. The CAE documents that mandate in the charter and makes sure the board and senior management understand the authority and responsibilities the law gives the function.
    Foundations of Internal Auditing › Purpose and Mandate
  2. Senior management sets the internal audit budget each year without any board involvement, and the CAE believes resources fall short of what the mandate requires. How should the CAE view this situation under the Global Internal Audit Standards?

    A) As acceptable, since budget approval is a routine management decision
    B) As the CAE's own nonconformance, which must be disclosed in every engagement report issued
    C) As authority for the CAE to set and approve the budget unilaterally
    D) As a gap in an Essential Condition to discuss with the board and senior management
    D) As a gap in an Essential Condition to discuss with the board and senior management

    Board approval of the budget and resources is an Essential Condition, a responsibility of the board and senior management that the CAE cannot impose. The CAE explains how the gap affects the function's effectiveness and documents the discussion. The CAE does not fill the gap by approving the budget alone.
    Foundations of Internal Auditing › Purpose and Mandate
  3. A division president presses an internal auditor to downgrade a finding from high to low before the report reaches the audit committee, although the evidence clearly supports a high rating. Which Principle most directly requires the auditor to keep the rating?

    A) Confidentiality, through protection of information
    B) Due professional care, through weighing cost and benefit
    C) Competency, through continuing professional development
    D) Integrity, through honesty and professional courage
    D) Integrity, through honesty and professional courage

    Demonstrate Integrity includes honesty and professional courage: reporting the facts accurately and holding a difficult position when the evidence supports it. The auditor should also tell the CAE about the pressure.
    Ethics and Professionalism › Integrity
  4. A company's board of directors has delegated oversight of internal audit to its audit committee. In the Global Internal Audit Standards, which body does the term "board" refer to for internal audit purposes?

    A) The full board only, because a committee cannot act on its behalf
    B) The executive committee chaired by the chief executive officer
    C) The shareholders who elect the directors at the annual meeting
    D) The audit committee to which oversight of internal audit is delegated
    D) The audit committee to which oversight of internal audit is delegated

    "Board" means the highest-level governing body or the committee, such as an audit committee, to which it has delegated oversight of internal audit. Where there is no formal board, it is whoever performs that oversight role.
    Governance Risk Management and Control › Governance and the Board
  5. A cashier at a busy store regularly takes cash from customers for sales that she never rings up on the register. Which fraud scheme is this?

    A) Check kiting
    B) Cash larceny
    C) Lapping
    D) Skimming
    D) Skimming

    Skimming takes cash before it is recorded, so there is no record to reconcile against. Cash larceny takes cash after it has been recorded, which leaves a recorded shortage.
    Fraud Risks › Fraud Concepts and Schemes
  6. A CAE is documenting the internal audit function's quality assurance and improvement program. Which activity is part of ongoing monitoring?

    A) An assessment by an outside team every five years
    B) Supervisory review of engagement workpapers
    C) The annual financial statement audit by external auditors
    D) A self-assessment validated by an outside assessor
    B) Supervisory review of engagement workpapers

    Ongoing monitoring includes engagement supervision and review, standard methodology, stakeholder feedback and performance metrics. Assessments by or validated by outside parties are external assessments.
    Quality and Conformance › Internal Assessments

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More IIA Certified Internal Auditor (CIA), Parts 1–3 decks

Foundations, Ethics and GovernanceGovernance, Risk, Control and QualityEngagement Planning and PerformanceCommunicating Results and MonitoringPractice Questions, Part 2Business Acumen and RiskInformation Security, IT and Financial ManagementPractice Questions, Part 3

← All IIA Certified Internal Auditor (CIA), Parts 1–3 decks, with the study guide and topic outline.

About these cards

Review status: Second-reader reviewed, with corrections applied.

Checked against:

  • IIA CIA Exam Expanded Test Specifications, 2025 syllabus (V2.09.2024): Part 1, Internal Audit Fundamentals, Sections A-D; the quality, conformance and Topical Requirements cards cover Part 3, Section C, Quality of the Internal Audit Function — topic outline only; no text copied
  • IIA Global Internal Audit Standards (issued 9 January 2024, effective 9 January 2025) and IIA Topical Requirements page (theiia.org), checked 2026-10-13 — no text copied

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